FTC Obtains $500,000 Penalty For Pre-Merger Reporting Act Violations

Brian L. Roberts, the Chief Executive Officer of Comcast Corporation, has agreed to pay a $500,000 penalty to settle Federal Trade Commission charges that he violated the Hart-Scott-Rodino Antitrust Improvement Act (HSR Act) in connection with his acquisitions of Comcast stock between 2007 and 2009. The FTC alleged that Roberts failed to file required notices before acquiring Comcast shares. The amount of the fine was limited by a number of factors, including that the violation was inadvertent and technical; that it was apparently due to faulty advice from outside counsel; that Roberts did not gain financially from the violation; and that he reported the violation promptly once it was discovered.

The HSR Act requires that under some circumstances, individuals who acquire voting securities must notify the FTC and Department of Justice and observe a waiting period before completing the acquisition. The notification and waiting period requirements apply to acquisitions that meet certain thresholds defined by the HSR Act.

In 2002, in connection with a merger agreement between Comcast and AT&T Corp., Roberts made an HSR filing which allowed him to acquire additional voting securities of Comcast until September 16, 2007. The FTC alleges that Roberts violated the notice and waiting requirements beginning in October 2007, when he failed to notify the FTC and DOJ before receiving Comcast voting securities beyond the thresholds set by the HSR Act. Roberts continued to receive Comcast securities without notifying the agencies through April 2009. In August 2009, he made a corrective filing with the agencies, according to the FTC. Roberts had admitted to inadvertent violations of the HSR filing requirements previously, in 1999 and 2000, but was not charged at that time by the FTC.

The Commission vote to authorize staff to refer the complaint to the Department of Justice, and to approve the proposed consent order, was 4-0. The DOJ filed the complaint and proposed consent order in U.S. District Court for the District of Columbia on December 16, 2011. The penalty must be paid within 30 days from when the court enters the order.

NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. This consent order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent orders have the force of law when signed by the District Court judge.

The FTC's Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.